The Success Principle

The Common Sense Guide to Running Your Own Business

Leaders: Pointers to Success from People of Influence

In the business of business books, the meaning of success changes with the times. Success literature, however, doesn’t. It is consistently inspirational by nature, and maintains that present sacrifice is necessary for future gain. That is the faith rewritten for each generation.

In the 1970s, when abundance seemed certain, Charles Reich’s The Greening of America advocated turning avocations into careers by moving from one company to another and weaving personality and financial gain into a tapestry of one’s own. It was the vanity of a decade during which wealth was thought of as either unnecessary or inevitable.

After the decadence of the 1980s, business books in the 1990s have played on the belief that success is essential, hard to get, but worth a fight. Thus there were flagrant examples of greed think such as Dan Kennedy’s 1993 title The Ultimate No B.S., No Holds Barred, Kick Butt, Take No Prisoners, and Make Lots of Money Business Success Book. It offered epigrams, including this bit of porcine advice, “even a blind hog finds a truffle once in a while.”

As the end of the decade approaches, how-to-succeed books purport that a fat bank account is essential – but far from a sure thing. Readers are prepared for lessons on how to be parsimonious, which even biographers have been including as themes. In a recent biography of John D. Rockefeller, for example, author Ron Chernow recounts how, even when he was a multimillionaire, Rockefeller took the streetcar and forced his children to keep a daily record of every penny they spent.

Three recent books illuminate the trend of step-by-step methods of gaining success. Ronald Yeaple is a professor at the University of Rochester’s William E. Simon Graduate School of Business Administration, an institution respected for its affiliations with high technology businesses in its home town. Yeaple, who has a PhD in electrical engineering, takes a scientist’s approach in The Success Principle to the key question: how does one get ahead?

The answer is with planning and an MBA. According to Yeaple, those with master of business administration parchments on their office walls can expect a 50 to 70% gain in pay at graduation compared with their pre-MBA salaries. With an MBA, one can expect pay raises of 12 to 20% annually for the first five years after graduation. The financial case for the graduate degree is clear: scrimp and study, for ye shall reap six figures of future reward.

Yeaple’s analysis of gain is based on a net present value of degree valuation. That estimation process takes into account the cost of an American MBA, say $100,000 of tuition and foregone income, and works out what that amount would grow to at various levels of interest over time. It then determines the years to break even on the time and money invested. If interest rates are 6 %, then break-even occurs in seven years, a good investment of time and money early in a business career. For those who wish to do their own break-even estimates, Yeaple provides formulas and survey data on what the average MBA graduate earns. The estimation methodology is not new, but the empirical data on what MBAs can expect to earn, at least in the U.S., is essential to making the exercise realistic.

Yeaple also estimates the net pre-tax additional income that degrees from various business schools in the U.S. will generate for the first seven years following award of the MBA. It varies from $267,727 (U.S.) for a Harvard MBA to a mere $32,994 (U.S.) for a Duke University MBA. Though it is an unclear why the differences in payoff are so great, it appears that, like designer jeans, having a brand name raises your market price. The best brand names – Harvard, Stanford, Chicago, for example – raise salaries far higher than lesser brand names such as Rochester and North Carolina. Thus the implicit advice: it is less what you know than who taught you that determines success.

Yeaple, like others who counsel those who want to succeed, urges students to find mentors, work at large firms where they can learn from masters, and gain relevant competencies in computers. Yet the unanswered question is whether it is the degree that makes the man or woman succeed. Or is it merely that those who have the drive and brains to get MBAs simply have more of what it takes to succeed in business? The question may be unanswerable, but Yeaple offers provocative insights into the process of becoming successful.

The Common Sense Guide to Running Your Own Business by Montreal public relations agency owner John Aylen is aptly titled. Organized as a catalogue of homilies, it urges, among other things, to first “curb cowardice, carelessness, laziness, and ignorance in yourself,” and ends with two pages of brief rules for success, including, “no meeting should last longer than an hour, make the best and highest use of your time, be a good role model, make it fun,” and one for the miser, “you will not win by overpaying anyone.”

Should anyone pay $16 for this kind of advice? Aylen says his book is for “people who don’t necessarily measure success by how close they’re coming to Bill Gates.” Rather, says Aylen, he is writing for those who measure success “by having an interesting life, supporting the two or three other people working with you, having interesting problems…and a reasonable standard of living.” Presumably Aylen’s audience is people who haven’t figured out this stuff on their own.

The value of The Common Sense Guide must be in its balance of advice, for Aylen advocates such obvious virtues as, “tell everyone the truth,” and offers genuine wisdom: Recognizing that many people invest in small businesses that haven’t a hope of success he says, “banks are doing a great job of stopping foolish people from being parted from their money.” This is a good book for the well intentioned, but a disappointment for anyone seeking novel insights.

Leaders: Pointers to Success from People of Influence carries homilies to a loftier plane. Author Gary Tannyan, a journalist, interviewed men he considers leaders and promotes their views as being useful for the aspiring would-be climber of organizations or independent entrepreneur. The five leaders profiled are Bronfman empire executive and senator J. Trevor Eyton, Ontario Federation of Labour president Gord Wilson, Air Miles card prime mover Craig Underwood, Shoppers Drug Mart founder Murray Koffler, and right wing politico Preston Manning. The interviews are accompanied by family snapshots including Murray talking with Prince Philip and Preston catching a fish. The value of these photos is obscure.

For those concerned that the reflections of a politician may not be the true grit of advice, there are quips from historical figures like Roman historian Tacitus, “reason and judgment are qualities of a leader,” and U.S. president Dwight Eisenhower, “you do not lead by hitting people over the head; that’s assault, not leadership.” Tannyan suggests that, “by examining a small part of their varied experiences and absorbing insights, we believe you will find inspiration, illumination, wisdom and entertainment.”

Each subject talks about his own career and whatever concerns him. Wilson discusses what trades belong to his union and union membership standards. Eyton comments that if Quebec succeeds in leaving Canada, Canada should do nothing for the residents who stay. The relevance of this to leadership is unclear.

There are also summaries of what the leaders themselves see as successful qualities. According to Koffler, “leaders who are frenetic and overexcitable are not really long-lasting.” Wilson says, “if you believe it can be done, try and do it.”

Tannyan’s reasons for selecting these interview subjects are not stated, other than his implicit admission that they were available. Manning, when asked what kind of skills are necessary for successful management, responds with, “I’ve never dealt with a large workforce,” before wobbling off on a discussion of valuing relationships with employees.This is vote getting, not management.

In terms of usefulness, Yeaple’s The Success Principle is the best of these three books. Yeaple is empirical rather than polemical and offers a window into the value of management education by a self-made engineer turned businessman turned educator. Aylen’s The Common Sense Guide to Running Your Own Business provides solid ways to manage one’s small business career; like a list of do’s and don’ts, his advice is balanced although rather self-evident. But Tannyan’s Leaders is unlikely to help potential leaders – it’s not even evident that he knows what makes his leaders run.